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Student debt is “good debt.” It’s an investment, recruiters say.

But, as seen in the case of Jennifer Atkins, a first-generation college graduate who earned three degrees, $100,000 in student debt doesn’t seem like an investment. Her earnings are too low to afford the loan payments, she told Nerd Wallet.

She goes on to say that she took out small loans to cover expenses in college. But, looking back, she wishes she had gotten mandatory career counseling, arguing it would have helped her understand the financial implications of her degree choices and habit of taking on debt.

As Nerd Wallet notes, “[s]ome students are willing to take on large amounts of college debt because they don’t connect with the reality that they’ll eventually have to repay it with interest. This aligns with what behavioral economists call ‘present bias,’ the idea that people often make choices that benefit them in the short term and overlook future consequences.”

But I’m skeptical that career counseling could have significantly aided Atkins—or anyone else, for that matter. Financial illiteracy is a systemic issue that starts in K-12, long before aspiring college students encounter financial aid officers.

As Generation Z grows up, The Street notes, they often find themselves unprepared for financial independence, coming to realize how financially illiterate they are “only after facing financial challenges,” which extends beyond student loans—auto loan debt is $1.607 trillion, and consumer debt is $17.3 trillion.

The absence of federal mandates for financial education contributes substantially to widespread financial illiteracy.

A stark illustration of this issue comes from a 2023 study by the Center for Financial Literacy at Champlain College. It revealed that only seven states earned an “A” for mandating a semester-long personal finance course or its equivalent. Notably, California and Washington D.C. received an “F,” underscoring their minimal requirements for personal finance education. And it shows! California sits on a staggering $1.6 trillion debt, while many Washingtonians carry over $24,000 in non-mortgage debt—almost as though inadequate educational institutions directly correlate with unfavorable societal outcomes.

Another issue, The Street confirms, is that even if schools were to mandate financial education, many teachers admit to feeling ill-equipped to teach the subject effectively.

This comes as no shock to me, given my experience with personal finance courses. I was taught personal finance by an instructor with a computer science background who had notable financial struggles of his own—hardly the ideal person to lead a financial literacy course. When I took the course at 18, I couldn’t help but wonder: who is this man to lecture me on personal finance?

He left the class clueless about crucial topics like compound interest, debt management—hint: avoid it—and how to open investment accounts. And, being that the class took place in a computer lab, students mostly played video games—“A” for effort.

Yet every high school graduate should know essential financial concepts such as how banks make money, how to make wise investments, how to manage a budget, how to navigate the process of purchasing a house—a process I wish someone had taught me about prior to closing on one this week—and, if they go onto college, how to align their degree with a career and how to choose a university—my recommendation: pick the less expensive school.

If I can implore college professors or K-12 educators to do anything, however, it would be not just to weigh the success of students solely on their ability to write a good paper, score well on an exam, or comprehensively regurgitate the history of communism—though they should be able to do all of that—but also by their ability to win financially. As a former boss of mine said, “You can’t save the world if you can’t pay rent.”

Photo by Africa Studio — Adobe Stock — Asset ID#: 99359224

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